0% Treasuries vs $238,000 To Be Safe In Retirement? | Base & Boost Strategy

0% Treasuries vs $238,000: which is better and for whom? How might you organize your portfolio to generate the income you need while not running out of money? And what role do Treasuries play vs other types of bonds and fixed-income-like investments? 

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Zero dollars in treasuries versus $238,000 in treasuries. Which might be better and for whom? Hello, Diamond Estec members, Super Savers and Course fans. I hope you're healthy and well. So, one of the biggest topics that we've been talking about regularly on this channel and on an almost daily basis in our VIP Investment Club is this. How might you organize your portfolio to generate the income you need while also making sure your savings and investments last you through retirement? Or perhaps maybe even beyond that, say because you want to leave behind a legacy for your heirs or charities of choice? And what role should treasuries play in a retirement portfolio? Do you need them at all? Or might other types of bonds, CDs, and annuities be a more suitable choice? In fact, we recently had a conversation with a friend who was about to hang up his working hat permanently. And this was pretty much his question to us. Do you think it's a good idea to put my last payout of $238,000 all into treasuries to be safe? And that's why in today's video we're going to dive deeper into our diamond nestegg base and boost strategy. So with that in mind, let's get started with part one of our base and boost mini series. Here are the three topics I'll be covering today. One, what is our diamond nesteg base and boost strategy? Two, how might the base part of the strategy work in retirement? And how would you generate the lifelong income you need? And three, how might the boost part of the strategy work in retirement? Let's dive in now folks. What is our diamond nested base and boost strategy? The way Marcus and I see it, our diamond nested base and boost strategy may be particularly useful if you're about to retire or if you're already in retirement. In fact, this base and boost strategy is the same one that Marcus's parents use in their portfolio and what he and I would do with our own savings and investments when, or rather if, we ever stop working to build out our sleep well at night portfolio. So here are the two key components to our Diamond Nest egg base and boost strategy. Although I'm sure many of you have already guessed what they are. The base part, this locks in the required income to cover your everyday essential living expenses in retirement. What you need to keep a roof over your head, the lights on at home, and food on the table, so to speak. In our mind, the base part of the strategy should mainly be oriented towards safe, stable, and predictable income that lasts a lifetime. No experiments or unnecessary risk taking here with the base. The boost part. This should protect you against inflation, help build generational wealth, and or be a source for discretionary spending, whether it's a special night out in town or a big vacation, or perhaps a new car for your grandchild or another loved one. The boost part is where you may want to take some controlled risk for possibly higher returns and income, but it may fluctuate over time, so you would not necessarily rely on it for your everyday essential expenses like you would for the base part of the portfolio. When implemented properly, our Diamond Nestec based and boost strategy may help you in building out your sleep well at night portfolio, just as we expected to do for us at some point in our later years, because you know you'll have enough income to cover your day-to-day basic living expenses for as long as you live. Again, that's the base component. And at the same time, with the boost component, you would still have the possibility to invest in higher yielding assets that may potentially keep that part of your portfolio growing so that you're protected against rising prices along the way, and perhaps so that you might even have something left over for the people and nicer things in life that matter most to you that the base part does not cover. And if you're interested in joining a high-quality private community of like-minded folks and learning more about how everyone is building out their base and boosting out the rest of their portfolio, come on over and join our private VIP investment club where these conversations are happening practically every day. Our May sale is on and just in time for Mother's Day. Use coupon code INCOME2026 at checkout to get $100 off of our private VIP Investment Club membership before next Sunday, May 17th at midnight Eastern Time. Visit our website at www.diamondnessc.com and click on this yellow private VIP Investment Club button to learn more. I've also linked everything below this video for your convenience. The one year option is our best value. It doesn't get much better than this. The $100 coupon code Income2026 can also be used for a popular bond course bundle. So now that you have a good overview of the two key components to our Diamond Nest Egg base and boost strategy, let's move on to the next part of today's discussion. How might the base part of the strategy work in retirement? And how would you generate the lifelong income you need? As we already discussed, the base part of our base and boost strategy should build a rock solid foundation for your retirement by covering your everyday essential living expenses. It's the portion of your portfolio you simply cannot afford to lose. So your principal should be protected, and your income should be safe, stable, predictable, and last for a lifetime. Here's how you could get started with defining and building your base. First, add up your everyday essential living expenses, including all your basic out-of-pocket expenses for things such as housing, food, transportation, utilities, health, prescription drugs, etc. The exact composition and numbers may look very different for different families and households, but you get the idea. Now, you might not know for certain how large some of these will be in retirement. For example, because you're planning to downsize your home or even move to another state. In such a case, you'll have to work with the best assumptions you can make. Second, after you've established your essential day-to-day cost base, you look at the other side of the equation and add up all the guaranteed lifetime income that you expect in retirement. For example, the first building block here will generally be Social Security. It's predictable, it's guaranteed, and it will last for a lifetime. Plus, it is inflation protected. Social Security by law must be indexed to inflation, so an almost perfect source of retirement income. The only problem is that for many, if not most of us, Social Security alone may not be enough to cover our entire base. And we generally can't really do much to increase the size of our monthly check if we leave aside some limited tools, such as delaying taking Social Security until the latest possible age of 70. The second building block here for the lucky few among us who still have one is a private or company pension. Such an extra pension might or might not be for life, and it might or might not be inflation protected. You'll need to find out for your specific case, as not every private or company pension is identical. And if the guaranteed lifetime income streams that you expect in retirement here cover your everyday essential living expenses at this point, congratulations, you're done. But if you find that there is a gap that your expected guaranteed lifetime income streams in retirement so far is less than your everyday essential living expenses, you would have to think about how to close the gap. And as a bit of a spoiler for what we will be covering in the rest of our base and boost mini-series, the average American will find that he or she has a gap, which means that on the cost side, you may now want to have another long, hard look at your day-to-day basic living expenses. For example, to see whether you reduce them a bit further here or there. And if you've been saving for retirement, be it in a tax advantage plan like a 401k or in a regular brokerage or savings account, you may want to use some of these savings to close your retirement income gap. Remember, we're still in the base part of the portfolio here. So the ideal way of closing the gap and letting you sleep well at night is using your savings to create a guaranteed income stream that will last you as long as you live. There are really two options here that we personally consider safe and guaranteed, treasuries and annuities. But there's some differences as well that are worth understanding. So let's start with the option that may give you a true lifetime guarantee, annuities. And specifically, we're talking about single premium immediate annuities or SPIAs and other types of fixed annuities with income riders that are designed specifically to generate a safe and predictable income stream that is guaranteed to last a lifetime. In fact, annuities were specifically invented as an insurance product for folks like you and me to create our own personal form of guaranteed lifelong Social Security like payments, so to speak, and protect against longevity risk beyond what the government is able to provide. Annuities from highly rated insurance companies are very safe, especially if you stay within the limits of your state guarantee association, as we always recommend. Just remember that some fixed annuities are irrevocable after the 30-day free look period, while for other types of fixed annuities you may have to pay surrender charges to exit the contract early. And while this can be a good solution for conservative and safety conscious retirees who will only sleep well at night if they know that their monthly annuity check is guaranteed for as long as they live, others in our community may prefer to keep more control of their money and invest in a ladder with treasuries or other non-callable government-backed bonds like agencies to generate the additional income they need to close the retirement gap. You could also do a CD ladder, but remember that CDs are generally not available beyond a maturity of five years. So we'll focus primarily on treasuries for this video. Treasuries with the backing of the full faith and credit of the US are safe as it gets. They can lock in rates for up to 30 years, and you can always sell them on the secondary market if you want to. Plus, their interest may be exempt from state and local taxes. The main drawback of treasuries, if you're looking for a guaranteed lifelong income stream, is that they cannot guarantee you coverage for life. That's just not something they're designed to do. Only certain types of annuities can do this, as we just discussed. So, how might you decide between treasuries versus annuities? There's no right or wrong here. Everyone's financial journey is different, as we always say, and you will need to decide for yourself what's right for your personal circumstances, goals, and expectations. Personally, we think the treasury versus annuity decision comes down to what you want out of your investment. With a treasury portfolio, you have to manage the risk of longevity yourself, with the potential downside being that you might run out of money at some point, depending on your overall situation. In addition, your annual cash flow will generally be lower than from an annuity of the same investment amount. That's the price you pay for the liquidity, as I mentioned before. But interest earned from treasuries may be exempt from state and local taxes, as I mentioned as well. Of course, this might matter more for your decision-making process if you live in a high tax state, and less if you live in a low or no tax state. Plus, with your own treasuries, whatever you don't spend gets passed onto your estate. With an annuity portfolio, you have the certainty that you cannot outlive your money no matter what, as we also discussed before. That's what they were invented for, to give you a guaranteed lifelong income, at least the SPIAs and other fixed annuities with income riders that we're talking about today. And with an annuity portfolio, your annual cash flow will usually be higher than from a treasury portfolio from the same investment amount. In other words, the same amount invested in an annuity versus a treasury will generally give you a higher yearly payout rate for long-term maturities. Again, that's because annuities are illiquid and there may be nothing left in the end for your estate, depending on the type of annuity. Even if you were to pass before your time. Remember, most annuities that we're talking about in this video will provide you with a guaranteed income for as long as you live. And some types of annuities may pass on some part of their remaining cash value to your estate, but in the end, they are not tools to build generational wealth. And of course, if you can't make up your mind, you may also want to mix and match, like quite a number of our diamond nest acres do. For example, 50-50 into annuities and treasuries, or in any other proportion you want. As we also often say, it's rarely all or nothing when it comes to money and investing. And there's no rule that you have to invest all your base money in either treasuries or annuities. And if you want to see how other members and super savers like yourself may be building up their base in a more private, friendly community setting, don't forget to take advantage of our May sale. Use coupon code INCOME2026 at checkout to get $100 off our private VIP Investment Club membership before next Sunday, May 17th at midnight Eastern time. Visit our website at www.diamondnesty.com and click on this yellow private VIP Investment Club button to learn more. I've also linked everything below this video for your convenience. The $100 coupon code INCOME2026 can also be used for our popular bond course bundle. Now, one more thought. You may have noticed that we haven't mentioned inflation yet as a factor that might sway your decision between treasuries and fixed annuities. And that's because both are very similar in this respect. Both of them, as well as agencies and CDs here, are normally not inflation protected. You can buy inflation protection for both annuities and treasury, so to speak, but all the available methods come with their own disadvantages, such as potentially high fees for an inflation rider on your SPIA or other fixed annuities, and lower coupons and cash flows and potentially even taxation of phantom income for tips, Treasury Inflation Protected Securities if held in a normal taxable brokerage account. So, in our mind, buy annuities and bonds for what they're designed to do. Provide safety, stability, and predictability. If you have the money and you structure your portfolio accordingly, though, we think that the ideal place to get inflation protection may not be the base part of your retirement portfolio, but the boost part, bringing us nicely to the next part of today's discussion. How might the boost part of the strategy work in retirement? As we discussed earlier, the boost part is where you may want to take some controlled risk for possibly higher returns and income. The returns and income from the boost part of your portfolio may fluctuate over time, but at least in the good times, and in particular if you have a medium to longer term horizon, it's where you may be able to continue building generational wealth and or find a source for discretionary spending while also protecting you against rising prices. Now, our diamond nest eggers hear me say often, everyone's financial journey is different. And this is even more true for the boost part of the portfolio. How you invest it is really up to you. That said, and as a starting point, you may want to decide for yourself on which side you want to err on two of the most critical questions for every investor. One, is your preference for more risk and more potential return? Or for less risk and less potential return? And two, is your priority capital growth or regular cash flow? This is a less well understood law of money and investing. Investments can either deliver high growth or high cash flow, meaning high income, but not both at the same time. Think regular stocks versus preferred stocks, or maybe even something as simple as taking out dividends or interest payments in cash versus reinvesting them. So at the extremes, some investors might keep their boost part in money market funds, treasuries, and other types of safe bonds, while others, knowing that their base part has covered their everyday essential living expenses in retirement already, may take more controlled risk or even go all in on higher yielding bonds. Like this 6% plus Dow bond that Marcus talked extensively about in his recent video, link below, as well as other potential growth opportunities like the ones that we and our VIP members talk and trade conversations about regularly in our VIP Investment Club. And if you want to join these engaging quality discussions in a more private community of like-minded folks, do take advantage of our May sale. Use coupon code INCOME2026 at checkout to get $100 off of our private VIP Investment Club membership before next Sunday, May 17th at midnight Eastern Time. Visit our website at www.diamondestic.com and click on this yellow private VIP Investment Club button to learn more. I've also linked everything below this video for your convenience. The $100 coupon code Income2026 can also be used for a popular barn course bundle. So going back to that conversation that I shared with you at the very beginning of this video about the friend who was about to hang up his working hat permanently and wanted to pick our brain on whether it was a good idea to put his last payout of $238,000 all into treasuries to be safe. Let's call him Jack. Well, it turned out that when Jack looked at his expected checks from Social Security and an annuity that he purchased a few years back, those were enough to just about cover his everyday essential living expenses. Jack and his wife were never big spenders, and it appears this is not something they expect to change in retirement. In any case, because Jack's base is covered, they're actually thinking of investing the entire $238,000 into the boost part of his portfolio and almost entirely into equities in the earlier years of retirement. No treasuries at all and no additional annuity because they're already good on that front, and then maybe rebalancing in his later retirement years. And this is why Marcus and I are fans of the base and boost strategy. Because knowing that your everyday essential living expenses are taken care of for as long as you live in the base part allows you to take some more calculated risk in the boost part, if that's what you want. Now, not everyone is like Jack and his wife. In fact, many may end up somewhere in the middle with a diversified portfolio where treasuries may have a place, or perhaps higher yielding bonds, structured products, and other alternative investments as well. And that is what we'll be covering in the rest of our base and boost mini-series, including two other very important questions. One, where does your emergency fund fall within our Diamond Nasdaq base and boost strategy? And two, how can the base and boost strategy be used for those not yet in retirement? So, what does your retirement portfolio look like? And do you use some version of this base and boost strategy? Or do you have more questions about our base and boost strategy that might be top of mind? Drop a comment below and let me, Marcus, and the rest of the community know. Alright, Diamond Aztec members, Super Savers and Course fans, I hope you enjoyed today's video and learned something new. And see you again very soon with more brand new wealth building content for your financial journey.